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New Report Gives First Ever Statewide Look at Methane Waste Problem in New Mexico

New Report Gives First Ever Statewide Look at Methane Waste Problem in New Mexico

Upwards of $240 Million in Natural Gas Wasted Per Year, $27 Million Hit to State Taxpayers

November 9, 2017

Kelsey Robinson, (512) 691-3404, krobinson@edf.org

(Nov. 9, 2017 — NEW MEXICO, STATEWIDE) Environmental Defense Fund today released a new report giving the first complete picture of the methane waste problem from oil and gas development in New Mexico. Drawing upon peer-reviewed scientific analysis and industry-reported inventories the report estimates the overall venting, leaking, and flaring of natural gas in New Mexico results in a loss of $182-$244 million worth of natural gas each year. That results in taxpayers and the state budget losing up to $27 million in taxes and royalty revenues per year.

This waste includes intentional emissions (venting), equipment leaks (fugitive emissions), and combustion of methane (flaring). These account for 570,000 tons of escaped methane every year in New Mexico – enough natural gas to meet the heating and cooking needs of every home in the state. The majority of this waste occurs from oil and gas wells that operate on federal and state trust lands — lands owned by and meant to be managed to the benefit of all New Mexicans. Smaller but still sizable amounts of waste are attributable to operations on private and tribal lands.

Methane is the main component of natural gas – the energy resource used to generate about 1/3 of our nation’s electricity and an important industrial, commercial and residential energy source. But the lack of oversight of New Mexico’s oil and gas industry has resulted in a substantial waste of an important domestic energy resource and needless pollution that threatens the climate and public health.

“This report gives us an important picture of how much we could gain by taking simple steps to become more efficient. Proven, low-cost fixes could eliminate up to half of the pollution by simply plugging leaks. By capturing that taxpayer-owned resource we can make a big difference for our state’s kids,” said U.S. Senator Tom Udall. “Just over the border in Colorado, the state has passed its own waste prevention rule, and that has sparked the growth of a new mitigation industry and created jobs. We can and should do the same in New Mexico, and New Mexico’s tech startup community is ready to help. Meanwhile, I’ll keep fighting for New Mexico at the federal level, and this report gives me important ammunition.”

In 2014, scientists working on a NASA study discovered a 2,500-square-mile cloud of methane hovering over the Four Corners region of New Mexico – the largest concentration of methane anywhere in the nation.

Image Source: NASA

Subsequent studies indicated that although the San Juan Basin includes other methane sources such as coal mines and geologic seepage, these sources are not large enough to explain the bulk of emissions, and that oil and gas development is the largest source of emissions contributing to this massive methane “hot spot.” Meanwhile, a 2015 report by business consulting firm ICF International found New Mexico to be the largest source nationwide of natural gas waste from federal and tribal lands – more than $100 million worth per year.

“We have known for some time that New Mexico has a serious problem with wasted methane,” said Jon Goldstein, Director of Regulatory and Legislative Affairs at EDF. “What this new report emphasizes is the multi hundred million dollar scope of this issue across New Mexico. Stopping this waste and capturing this revenue is a major piece of low hanging fruit in a time of tight state budgets.”

This report aims to clarify the scope of New Mexico’s methane problem in order to identify the greatest opportunities for achieving emission reductions statewide. Natural gas that isn’t wasted can be used or sold, to the benefit of New Mexico taxpayers. Requirements to reduce methane waste and pollution increase funding for important state needs like education, roads, and bridges, and allow companies to create New Mexico jobs of the future in clean, efficient energy production. Recent studies have shown that companies in the Leak Detection and Repair (LDAR) industry have enjoyed up to 30 percent business growth in states that have enacted regulations to reduce methane.

“We have dedicated lawmakers turning over cushions to find funding to improve education for our state’s children, all the while we have significant revenue being lost into the atmosphere,” asserted Bill Jordan, with New Mexico Voices for Children, who also participated in the telephone press conference. “To break it down, an additional $27 million in our state’s budget would allow us to increase our Pre-K enrollment by 50 percent. That means an additional 5,000 children could receive vital early childhood education programs. It’s funding that our communities and our youngest children need.”

“When the loss to taxpayers is so significant, it’s easy to overlook the public health implications, but we simply cannot ignore the potential health consequences as a result of pollution related to oil and gas development,” commented Colin Baillio, policy director for Health Action New Mexico. “When this methane is released into the air, so too are harmful pollutants that have significant public health consequences. Methane leaks also release toxins like benzene that cause cancer and smog pollution that leads to respiratory diseases and childhood asthma attacks. With the federal government in full retreat on this issue, we really need state action on methane to protect New Mexicans’ health by dramatically cutting methane leaks and pollution from other dangerous toxins.”